Tax refunds are about 30% smaller than last year — but it’s early
Feb 14, 2024, 5:05 PM | Updated: Mar 26, 2024, 8:28 am
The IRS is writing checks for smaller tax refunds this year, but a Utah expert says it's still early in the tax season. (Canva)
(Canva)
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SALT LAKE CITY — Hoping for a large tax refund? Judging by the size of refund checks the IRS is writing so far this year, that may not happen.
As of Feb. 2, the average refund is $1,395, down about 29% compared to the average refund of $1,963 in 2023.
However, because tax filing season began on Jan. 2, the averages listed above reflect data from only five days.
“I caution anyone on reading too much into an entire year, or a tax season of 3½ months, on five days worth of data,” Mark Steber, chief tax information officer at Jackson Hewitt, told CNBC.
Also, the IRS began processing tax returns a little later this year than it did last year. Filing season started Jan. 29, compared with last year’s Jan. 23 start, which means the IRS hasn’t processed as many returns as it had at this point last year. That skews the comparison of refund sizes, as reported by Morningstar.
Taxes and inflation
Susan Spiers, of the Utah Association of Certified Public Accountants, said inflation is taking a financial toll on Americans.
“What our taxpayers have been doing,” Spiers told KSL NewsRadio, ” is they’ve been opting to have less withheld from their paycheck so they can spread their money (around).
“… Then, come the end of the year when we’re filing our income taxes, they may get a bill that they’re totally not expecting, and they’re not prepared to pay. So that’s a little scary,” she said.
You might want to consult a CPA if . . .
Spiers said in today’s economy workers are resorting to side gigs when money is tight. She advises talking to a CPA to find out about what you can deduct and if, going forward, you need to make quarterly tax payments.
Consulting with a CPA or financial advisor is recommended if your family grows, or if you are going through a divorce or other life-changing event.
“It’s worth the money when you have these life events that are changing your financial situations,” she said.
“That doesn’t mean that you have to go to a CPA every year. But when these things happen — even think about as your kids start to leave home. We’re getting away from the child tax credit, but then maybe we’re moving into tuition credits.”
Related: Utah Taxpayers Association backs change to voter initiative process
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